'United Breaks Guitars': Did It Really Cost The Airline $180 Million?

By now nearly 4 million people have watched the 'United Breaks Guitars' video that has made its way around the web and back. A quick catch-up: United Airlines passenger Dave Carroll had his Taylor guitar destroyed by the airline's baggage handlers during a flight last year. After United repeatedly declined to reimburse him for the damage, he wrote a now-famous song decrying their customer service and their brand. It was funny, justified and smart.

The damage to United's brand was undeniable. But perhaps the craziest claim to come surface during the the entire United Breaks Guitars episode comes from Chris Ayres of The Times Online in the U.K. In a column earlier this week, Ayres claimed the Carroll mishap actually cost United $180 million, or 10 percent of its market cap:

"..within four days of the song going online, the gathering thunderclouds of bad PR caused United Airlines' stock price to suffer a mid-flight stall, and it plunged by 10 per cent, costing shareholders $180 million. Which, incidentally, would have bought Carroll more than 51,000 replacement guitars."

While there were certainly 'thunderclouds of bad PR' - metaphorically speaking, of course -- the Times makes a pretty unforgivable leap of logic here. It's more than a bit bold to say that the Carroll incident caused the United stock price drop.

Though you can certainly imagine a handful of enterprising traders moving shares of United on the news that it was fending off a new media attack - YouTube arbitrage? - it's borderline silly to suggest that a something like a cheeky web video could move such a prominent stock 10 percent. United is an enormous, struggling company, with a stock price that has been on a downward trend since last fall. In other words, it's a typical airline stock.

What do you think? Is there any way Carroll's song could have cost United $180 million? What kind of damage did it do to United's brand? How do you value bad PR like this?